Incorporating More Realistic Psychology into Economic Analysis

ECS557 Incorporating More Realistic Psychology into Economic Analysis

  • Topics



    This course will explore some of the ways that insights from psychology can be translated into formal economic analysis. The emphasis is on how economists might incorporate these insights to answer important economic questions using the rigorous techniques of traditional economics. The material will be presented in terms of simple formal models. Topics include ways that we can be more realistic about people's preferences (for instance by understanding that people care not just about absolute outcomes, but how those outcomes compare to expectations and other reference points), as well as ways we can be more realistic aboutimperfections in human reasoning and choices, such as allowing for people's biases in predicting future tastes, the overly narrow focus people bring to important choices, self-control problems, biases in probabilistic judgment, and errors people make in learning from each other.

  • Learning outcome

    Learning outcome

    The students should be able to:


    Evaluate and apply advanced topics in behavioral economics in their own research, with special focus on the application of theoretical models of rationality.


    Identify new research questions within behavioral economics that can address important real life questions and policy issues.


    Communicate and discuss research with a peer audience.

  • Teaching


    The course consists of ten lectures over four days. The students will also be given the opportunity to present their own research.

  • Assessment


    Approved term paper (maximum 15 pages) on a relevant topic.

  • Grading Scale

    Grading Scale


  • Semester


    Autumn 2017

  • Literature


    To be announced


ECTS Credits
Teaching language

Course responsible